By Adedapo Adesanya
The Nigerian National Petroleum Corporation (NNPC) has reiterated its commitment to abide by the output cut agreement of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies called OPEC+ to stabilise the global oil market.
The Group Managing Director of NNPC, Mr Mele Kyari, gave the assurance at the ongoing virtual Gulf Intelligence UAE Global Energy Forum 2021.
He said despite the negative effects of the production cuts on government revenues, it was the best step towards redeeming the value of oil on the global market, in the interest of all.
Speaking on the topic, Outlook for Africa/Nigeria’s Oil & Gas Sector in Post-Covid-19 Era, Mr Kyari said NNPC was hopeful that by the end of the year, the demand for crude oil would pick up.
He said that this leads to a marginal increase in output, stressing that the corporation was focusing more on gas, condensate and other revenue streams to tackle the revenue challenges arising from the production cuts agreement.
He explained that gas had proved to be a steady and reliable revenue stream at the height of the COVID-19 pandemic in 2020, adding that gas production and utilisation would, therefore, remain a key priority for the corporation in 2021.
Earlier in his presentation, the Minister of Energy & Agriculture, United Arab Emirates (UAE), Mr Suhail Mohamed Al Mazrouei, appealed to all oil-producing nations not to flood the market with crude.
He said the UAE was at the moment more concerned about balancing the market forces of demand and supply in the global market than growing market share.
OPEC+, a 23-nation alliance that includes Nigeria as a primary member and non-members like Russia and Kazakhstan, agreed to revive 500,000 barrels a day in January as world demand gradually improves.
The coalition is currently halting 7.2 million barrels a day, or about 7 per cent of global supplies but in February, the alliance’s output will fall steeply.
While most OPEC+ nations will keep supplies steady next month, the de facto leader, Saudi Arabia has promised a unilateral cutback intended to accelerate the rebalancing of the market.
Oil demand remains vulnerable as a more infectious strain of the virus triggers renewed lockdowns in Europe and Asia.
Dipo Olowookere